As the United States Securities and Exchange Commission (SEC) seeks an interlocutory appeal in its case against Ripple Labs, lawyers working in the crypto space expressed confidence in Ripple’s case, with some underscoring that the XRP (XRP) token is not a security.
On Aug. 9, the SEC sent a letter to Judge Analisa Torres stating that it was moving to appeal the court decision, which it says warrants a fresh look by an appellate court. The SEC asked the judge to put the case on hold while the appeal is in progress.
The SEC’s move to appeal sparked questions among community members, with some thinking that the SEC’s move to appeal is a move to challenge the “non-security” status of XRP. However, crypto lawyers assured the community that this is not the case.
According to crypto lawyer Jeremy Hogan, the two issues are separate. Hogan explained that if the SEC wins the appeal on the sales, Ripple would not be able to facilitate sales using exchanges. Despite this, the lawyer believes that exchanges could keep XRP listed as long as the sales are not done by Ripple.
Amid the SEC’s new move, Cointelegraph reached out to crypto lawyer Oscar Franklin Tan, the chief legal officer of the nonfungible token (NFT) platform Enjin, to break down some of the intricacies surrounding the SEC’s move.
According to Tan, appeals normally take place once the case is finished. However, in this case, the SEC’s appeal is interlocutory which simply means that they want to appeal even though the case isn’t finished yet.
The SEC does not have the “right” to appeal just yet which is why they are asking permission to file an “interlocutory” appeal. Ripple will file its response with the Court next week. Stay tuned. https://t.co/zCeVZhYfxc
— Stuart Alderoty (@s_alderoty) August 9, 2023
When asked how this appeal could potentially influence the course of the case, Tan told Cointelegraph that it’s all about the momentum. He explained:
“The SEC is asking to pause the XRP case while the interlocutory appeal goes on. If the appeal is allowed, whoever wins the appeal builds momentum in the main case.”
While Hogan believes that the appeal will not affect XRP's status as a non-security, Tan believes that this is still what the SEC is after. Tan believes that the SEC is still looking to overturn the decision that XRP is not a security back in July.
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Tan also explained that at the moment, the SEC is using the conclusion in the Terraform Labs case against the judge in the XRP case. The crypto lawyer said that the SEC is arguing that a higher court should "break the tie" among the different conclusions. However, Tan believes that the SEC should let the court process proceed normally. He explained:
“What the SEC should have done is to provide clearer guidance before taking anyone to court. Since Ripple and other parties decided to take the SEC to court to get this guidance, the SEC should let the court process proceed normally.”
Meanwhile, Ripple’s chief legal officer Stuart Alderoty told the community to “stay tuned” and noted that Ripple will file its response with the court next week.
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